The stock of PayPal (PYPL) is down 16% on news that a planned acquisition of the financial technology firm has fallen apart.
Multiple media reports say that companies Stripe and Advent International have ended negotiations aimed at acquiring PayPal for $50 billion U.S.
The reason why privately held financial-technology company Stripe and private-equity firm Advent have given up on acquiring PayPal is not immediately clear.
However, PayPal will reportedly turn its focus to a turnaround strategy under CEO Enrique Lores.
Under Lores’ direction, PayPal is planning to reorganize and separate its checkout, consumer financial services, and payment processing business units.
The CEO has also said that PayPal could spinoff part of its business in the future.
PayPal has struggled with a declining business for years. The company’s stock peaked at $300 U.S. per share in 2021, during the pandemic, when the company was valued at $280 billion U.S.
PayPal’s branded checkout business, which allows merchants to convert sales through the company’s platform, has been under pressure amid steadily rising competition.
Still, PayPal processes nearly $2 trillion U.S. in payment volumes annually, has 440 million active accounts, and owns the most prominent U.S. peer-to-peer network with Venmo.
PayPal is also one of only four globally recognized payment networks, alongside Mastercard (MA), Visa (V), and American Express (AXP).
Some analysts said that the $50 billion U.S. that Stripe and Advent offered for PayPal was too low a bid for the payments giant.
PYPL stock has declined 78% over the last five years to trade at $61.47 U.S. per share.
Tech Insider
